UK government Ministers are reportedly planning to launch an investigation into the collapse of ‘football player trading exchange’ Football Index.
The Times reported that legislators are ‘deeply concerned’ by the collapse of the operator, after users lost over £100 million following its crash into insolvency.
“This case further reinforces the need for our comprehensive review of gambling laws,” a government source told the outlet.
“This independent investigation into Football Index will feed into that work and if we need to make changes to regulation to protect people, we will.”
Football Index, the trading arm of BetIndex, was launched in 2015, marketing itself as a ‘football stock exchange’ where users purchased shares in active players, winning dividend payouts depending on a footballer’s on-pitch performance.
After making the decision to cut dividends on players from 14p to 3p, the Jersey-based company suffered a player and investor exodus, with some customers losing tens of thousands, and many scrambling to sell their shares and leave the site, prompting a crash.
The firm’s operating licence was subsequently suspended by the UK Gambling Commission (UKGC), whilst standards body the Betting and Gaming Council (BGC) also suspended its membership.
Upon entering administration, the brand suspended all trading operations, but BetIndex continued to remain hopeful that the company could be saved ‘as a going concern’.
A company statement at the time read: “Until such time as the administrators are in office, the platform will remain suspended and no trading or payment transactions, such as deposits and withdrawals, will be possible.”
Sponsorship arrangements with Nottingham Forest and Queens Park Rangers were also cancelled, and a number of former customers are now grouping together to pursue legal action, enlisting the assistance of law firm Leigh Day.
The UKGC may become a target of Leigh Day’s planned litigation on behalf of customers, as the regulator faces accusations of negligence for granting Football Index’s UK sports betting licence.
“Whilst it is very early days in our investigations on behalf of the thousands of people who have lost money, there are serious questions which will need answering regarding what has happened at Football Index and what the Gambling Commission understood of Football Index’s activities,” said Leigh Day partner Nichola Marshall.
Parliamentary anger has also been directed at the Commission, with the All Party Parliamentary Group for Gambling Related Harm (GRH APPG) describing the situation regarding Football Index as a ‘scandal’ in a letter to Ministers, including Culture Secretary Oliver Dowden.
The cross-party group, chaired by Carolyn Harris MP of the Labour Party, has further argued to Ministers that the case demonstrated the need for greater overhaul and oversight of the UK’s gambling regulatory framework.
It was also revealed last month that the UKGC had been warned over Football Index in January 2020, with an unnamed whistle blower describing the operator as a ‘dangerous pyramid scheme’.